Tenancy deposit protection time limits for compliance

A landlord or agent who fails to comply within the relevant time limit is liable to financial sanctions and restrictions on the use of a section 21 notice to end the tenancy.

There are set time limits within which a landlord should comply with the requirements of the tenancy deposit scheme. These depend on when the tenancy deposit was received by the landlord.

For a deposit received on or after 6 April 2012, the landlord/agent must protect the deposit and serve the prescribed information within 30 days of receiving the deposit.[1]

If the landlord or agent do not do so, the:

• tenant can make a section 214 claim for a sum of between one and three times the value of the deposit

• landlord cannot use a section 21 notice in most circumstances

Before 6 April 2012 the time limit for compliance with the tenancy deposit protection rules was 14 days.

The landlord or agent who received a deposit between 6 April 2007 and 5 April 2012 had 14 days to protect the deposit and serve the prescribed information.[2] There were no sanctions for late compliance as long as the deposit was protected and prescribed information was served before the court hearing, even if this was after the 14-day time limit.[3]

From 6 April 2012, the time limit for compliance was extended to 30 days.[4]

Landlords or agents of assured shorthold tenancies in existence on 6 April 2012 had until 6 May 2012 to comply with the tenancy deposit protection obligations, unless they had done so already.[5]

In order to serve a valid section 21 notice on a tenancy where a deposit was received between 6 April 2007 and 5 April 2012 the landlord must have either:

• protected the deposit before 6 May 2012

• returned the deposit to the tenant before serving a section 21 notice

If the landlord failed to comply, the tenant could also make a section 214 claim for a sum of between one and three times the value of the deposit. Deposit compensation claims are subject to the Limitations Act 1980 and time limit for taking action is 6 years from when the breach occurred.

Even though the law governing the protection of tenancy deposits came into effect on 6 April 2007, most assured shorthold tenancies that commenced before this date are affected by the legislation.

Statutory periodic tenancy arose on or after 6 April 2007

Where a deposit was paid in respect of a fixed-term tenancy before 6 April 2007, and the tenancy became a statutory periodic tenancy on or after that date, then unless the deposit had been returned or the tenancy had ended, the landlord/agent had to protect the deposit and serve the prescribed information by 23 June 2015.[6]

If the deposit was not protected and/or the prescribed information not served, the:

• tenant can make a section 214 claim for a sum of between one and three times the value of the deposit

• landlord is prevented from serving a section 21 notice in most circumstances

Statutory periodic tenancy arose before 6 April 2007

Where a deposit was paid in respect of a fixed-term tenancy that became a statutory periodic tenancy before 6 April 2007, and has never been renewed since, the landlord or agent is not liable to a Section 214 claim if they failed to protect the deposit or serve the prescribed information. It is not clear whether a failure to serve the prescribed information would invalidate a section 21 notice in this scenario.

However, in most circumstances, the landlord or agent cannot use a section 21 notice to end the tenancy.[7]

When the tenant's deposit was protected and the prescribed information served during the initial/original tenancy (whether fixed-term, contractual or statutory periodic), and the deposit remains protected with the same authorised scheme, there is no requirement on the landlord/agent to re-serve the prescribed information each time the tenancy is replaced by a new tenancy or becomes statutory periodic.

This is referred to as 'directly or indirectly' renewing the tenancy in the legislation and refers to the situation where there is a series of tenancies one after another. This applies regardless of whether the landlord/agent complied with the requirements within 30 days of receiving the deposit or not.[8]

For this purpose, both the landlord(s) and tenant(s) must be the same at the start of the replacement/statutory periodic tenancy, and the premises let must be the same or substantially the same.[9]

The law with regard to the renewal of tenancies and deemed compliance with the tenancy deposit protection rules was changed on 26 March 2015 and it applies retrospectively, ie it is treated as being in effect since 6 April 2007.[10]